Meaning and transaction use
The IFC Family Business Governance Handbook states that a formal succession plan supports continuity and should make needed skills and leadership available when an outgoing senior manager must be replaced. [S1]
IFC guidance identifies governance structures and succession as central to transition between generations. [S2]
Proposed control method: maintain role-specific emergency and planned-successor files linked to governing and estate documents.
Worked example
Illustrative readiness review only. Assume 12 critical roles: five have ready-now successors, four have emergency-only coverage and three have no approved coverage.
Scroll the table horizontally to view all columns.
| Measure | Calculation | Result |
|---|---|---|
| Ready-now coverage | 5 / 12 | 41.7% |
| Emergency-only coverage | 4 / 12 | 33.3% |
| No approved coverage | 3 / 12 | 25.0% |
| Any documented coverage | (5 + 4) / 12 | 75.0% |
The illustrative review shows documented coverage for 75.0% of critical roles, with three roles uncovered.
Proposed transaction review process
Map transitions
Identify leadership, ownership, trustee and governance roles.
Set criteria
Define competence, eligibility, conflicts and selection authority.
Develop candidates
Use education, experience, mentoring and assessed milestones.
Align documents
Coordinate emergency plans, trusts, wills, boards and communication.
Evidence checklist
Role map
Critical responsibilities, authority and dependencies.
Candidates
Skills, experience, readiness and development plans.
Documents
Corporate, trust, estate and family-governance instruments.
Activation
Trigger, decision body, interim authority and communication plan.
Decision framework
| Situation | Proposed action |
|---|---|
| No family candidate is ready | Use qualified external or interim leadership. |
| Ownership and management diverge | Define separate transitions and governance rights. |
| A successor has a conflict | Apply the conflict and alternative-selection process. |
| Circumstances change | Refresh readiness and governing documents. |
Common errors to check
- Naming a successor without testing competence.
- Ignoring emergency succession.
- Confusing ownership with management authority.
- Leaving legal documents misaligned.
Build the succession readiness map
Bring critical roles, candidate plans and governing documents to a succession review. Reconcile planned and emergency transitions.
Discuss the transactionPrimary references and editorial scope
- IFC Family Business Governance Handbook
Guidance on formal CEO and senior-management succession planning and continuity. Reference checked 17 September 2026. - IFC family-business governance guidance
Guidance on governance and succession for transition across generations. Reference checked 17 September 2026.
General governance education using IFC guidance. Figures are hypothetical. Corporate, trust, estate, tax and family documents determine actual authority and transfer outcomes.
General business information. Obtain advice appropriate to the legal, tax, accounting and financing facts. No offer, lender commitment or transaction outcome is represented. All worked examples use expressly assumed figures. Editorial draft date: 17 September 2026.
